STAG Industrial, Inc.
), a real estate investment trust (REIT), has recently acquired
three industrial buildings from an unnamed seller for $19.8
million. Spanning 518,838 square feet on an aggregate, two of the
acquired properties are located in Mebane, North Carolina, while
the other is located in Dallas, Georgia.
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STAG INDUSTRIAL (STAG): Free Stock Analysis
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The acquired portfolio comprises of two warehouses and distribution
facilities, and a light manufacturing facility. The properties are
currently fully leased to Armacell LLC, which manufactures and
distributes foam insulation products for mechanical insulation, air
conditioning and refrigeration, duct work, and various other
commercial and residential applications.
Earlier, during second quarter 2012, STAG Industrial had acquired a
portfolio of 12 industrial buildings totaling 2.3 million square
feet for $74.9 million. Consequently, total portfolio square
footage increased to 20.4 million - a 49% rise since its initial
public offering in April 2011. With the present transaction, the
year-to-date tally for total acquisition cost has reached
approximately $165 million.
Since its inception, STAG Industrial has diligently acquired
individual Class B, single-tenant industrial properties throughout
the U.S. The company specifically focuses on the secondary markets
with purchase prices as low as $5 million.
The strategic investment objectives of the company hinge upon the
fact that single-tenant properties usually require less expenditure
to lease and operate than the multi-tenant ones. In addition, Class
B industrial properties tend to have higher current returns and
lower volatility than their Class A counterparts. Furthermore,
secondary markets also generally have less occupancy and rental
rate volatility than primary markets.
We presently have a Neutral recommendation for STAG Industrial,
which currently has a Zacks #2 Rank that translates into a
short-term Buy rating. We also have a Neutral recommendation and a
Zacks #3 Rank (short-term Hold rating) for
First industrial Realty Trust Inc.
), one of the competitors of STAG Industrial.